The Federal Financial Institutions Examination Council (FFIEC) has issued a joint statement providing guidance for financial institutions about the role of cyber insurance in risk management of informational technology systems. The FFIEC comprises the principals of the following: The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, Consumer Financial Protection Bureau, and State Liaison Committee.

On April 10, 2018, the FDIC, as a member of the FFIEC, issued statement FIL-16-2018, applicable to all FDIC-supervised institutions. Similarly, on April 11, 2018, the Office of the Comptroller of Currency (OCC) issued a similar bulletin (OCC Bulletin 2018-8) on the FFIEC’s joint statement, noting that the joint statement applies to all institutions supervised by the OCC. The joint statement and associated FDIC letter and OCC bulletin include the following highlights:

FDIC-supervised institutions are not required to maintain cyber insurance. However, cyber insurance could offset financial losses from a variety of exposures—including data breaches resulting in the loss of confidential information—that may not be covered by more traditional insurance policies.

Traditional general liability insurance policies may not provide effective coverage for all potential exposures caused by cyber events.

Cyber insurance does not replace a sound and effective risk management program.

Cyber attacks are increasing in volume and sophistication and that traditional general liability coverage insurance policies may not provide effective coverage for potential exposures caused by cyber events

Cyber insurance may help reduce financial losses from a variety of exposures, such as data breaches resulting in the loss of sensitive customer information.

Cyber insurance does not diminish the importance of a sound control environment; rather, cyber insurance may be a component of a broader risk management strategy.

As institutions weigh the benefits and costs of cyber insurance, considerations may include: (a) involving multiple stakeholders in the cyber insurance decision; (b) performing proper due diligence to understand available cyber insurance coverage; and (c) evaluating cyber insurance in the annual insurance review and budgeting process.

The FFIEC’s statement is not intended to contain new regulatory expectations, but instead to provide awareness of the potential role of cyber insurance in financial institutions’ risk management programs. Financial institutions ultimately remain responsible for maintaining a control environment consistent with the guidance outlined in the FFIEC IT Examination Handbook.

Over a dozen lawsuits have been filed by users and investors against Facebook after it was revealed last month that Cambridge Analytica, a political research firm, obtained personal information on millions of Facebook users. Cambridge Analytica obtained the data through a personality test app linked to Facebook accounts. Many of the lawsuits claim the information was used to create profiles and target audiences for purposes of categorizing voters in the 2016 presidential election. Most of the lawsuits accuse Facebook of failing to protect users’ personal information despite stating in its privacy policy that Facebook users own and control personal information posted on Facebook. Some of the lawsuits go beyond allegations of privacy violations and accuse Facebook of negligence, consumer fraud, unfair competition, securities fraud and racketeering. On March 16, Facebook announced that it was suspending Cambridge Analytica for violating Facebook’s policies on data gathering.

Starting April 9, Facebook will begin alerting users whose data may have been harvested by Cambridge Analytica. As part of this process, the company plans to post a link at the top of users’ news feeds that will allow them to see which apps are connected to their Facebook accounts and what information those apps are permitted to see. Additionally, Facebook CEO Mark Zuckerberg is scheduled to testify before U.S. Congress on April 10 and April 11. Zuckerberg will appear before the Senate Judiciary and Commerce committees on April 10 and the House Energy and Commerce Committee on the morning of April 11. Zuckerberg’s testimony will hopefully shed more light into how this alleged violation occurred and its broader implications on data privacy in general.

On Wednesday, March 28, 2018, the Alabama Data Breach Notification Act of 2018 (SB318) was signed into law by the Governor, making Alabama round out the roster of 50 states with data breach notification laws. (South Dakota’s data breach notification was signed by its governor on March 21, 2018, making it the 49th state.) The new law will be effective on June 1, 2018. Below is a more detailed summary of the Alabama law:

Definitions.

The Alabama law defines a security breach as the “unauthorized acquisition of data in electronic form containing Sensitive Personally Identifying Information (“Sensitive PII”). As is typical, a breach does not include either: (a) good faith acquisitions by employees or agents unless used for unrelated purposes; (b) the release of public records not otherwise subject to confidentiality or nondisclosure requirements; or (c) any lawful investigative, protection or intelligence activities by a state law enforcement or intelligence agency.

“Sensitive PII” is defined to include: (a) an Alabama resident’s first name or first initial and last name in combination with one or more of the following regarding the same resident:

A non-truncated SSN number or tax identification number;

A non-truncated driver’s license number, state ID number, passport, military ID, or other unique identification number issued on a government document;

A Financial account number, including bank account number, credit card or debit card, in combination with any security code, access code, password, expiration date, or PIN, that is necessary to access the financial account or to conduct a transaction that will credit or debit the financial account.

Any information regarding an individual’s medical history, mental or physical conditions, or medical treatment or diagnosis by a health care professional.

An individual’s health insurance policy number or subscriber identification number and any unique identifier used by a health insurer to identify the individuals.

A user name or email address, in combination with a password or security question and answer that would permit access to an online account affiliated with the covered entity that is reasonably likely to contain or is used to obtain Sensitive PII.

Notification Requirements.

Notification to Individuals. If a covered entity determines that an unauthorized acquisition of Sensitive PII has or is reasonably believed to have occurred, and is reasonably likely to cause substantial harm, it shall notify affected individuals as expeditiously as possible and without unreasonable delay but no later than 45 days after the determination of both a breach and a likelihood of substantial harm. A federal or state law enforcement agency may request delayed notification if it may interfere with an investigation. If an entity determines that notice is not required, it shall document the determination and maintain the documentation for at least 5 years.

Format and Content. Written notice can be by mail or email, and must include: (1) the estimated date or date range of the breach; (2) a description of the Sensitive PII acquired; (3) a general description of actions taken to restore the security and confidentiality of the personal information; (4) steps an affected individual can take to protect himself or herself from identity theft; and (5) contact information for the covered entity in case of inquiries.

Substitute Notice. Substitute notice can be provided if direct notice would cause excessive cost relative to the covered entity’s resources, if the affected individuals exceed 100,000 persons, or if there is a lack of sufficient contact information for the required individual to be notified. Costs are deemed excessive automatically if they exceed $500,000. Substitute notice may include both posting on the website for 30 days and using print or broadcast media in the major urban and rural areas where the individuals reside. An alternative form of substitute notice may be approved by the Attorney General.

Notification to Attorney General. If the affected individuals exceed 1,000, the entity must notify the Attorney General as expeditiously as possible and without unreasonable delay, but no more than 45 days from receiving notice of a breach by a third party agent or upon determining a breach and substantial likelihood of harm has occurred. Notice must include: (1) an event synopsis; (2) the approximate number of affected individuals in Alabama; (3) any free services being offered by the covered entity to individuals and instructions on how to use them; and (4) contact information for additional inquiries. The covered entities may provide supplemental or updated information at any time, and information marked as confidential is not subject to any open records or freedom of information laws.

Notification to Consumer Reporting Agencies. If the covered entity discovers notice is required to more than 1,000 individuals at a single time, it shall also notify, without unreasonable delay, all consumer reporting agencies.

Third Party Notification. Third party agents experiencing a breach of a system maintained on behalf of a covered entity shall notify the covered entity as expeditiously as possible and without unreasonable delay, but no later than 10 days following the determination (or reason to believe) a breach has occurred.

Enforcement

Enforcement Authority. Violating the notification provisions is an unlawful trade practice under the Alabama Deceptive Trade Practices Act (ADTPA), and the Attorney General has exclusive authority to bring an action for penalties. There is no private cause of action. The Attorney General also has exclusive authority to bring a class action for damages, but recovery is limited to actual damages plus reasonable attorney’s fees and costs. The Attorney General must submit an annual report.

Penalties. Any entity knowingly violating the notification provisions is subject to ADTPA penalties, which can be up to $2,000/day, up to a cap of $500,000 per breach. (“Knowing” means willfully or with reckless disregard.) In addition to these penalties, a covered entity violating the notification provisions shall be liable for a penalty of up to $5,000/day for each day it fails to take reasonable action to comply with the notice provisions. Government entities are subject to the notice requirements, but exempt from penalties, although the Attorney General may bring an action to compel performance or enjoin certain acts.

Other Requirements

While enforcement authority is limited to notification violations, the statute also instructs entities to take “reasonable security measures”, provides guidance on conducting a “good faith and prompt investigation” of a breach, and requires covered entities to take reasonable measures to dispose of Sensitive PII. It is unclear how these provisions might be enforced, except potentially to determine if a notification violation was willful or with reckless disregard.

“Reasonable Security Measures”. Covered entities and third party agents must implement and maintain reasonable security measures to protect Sensitive PII, and the law provides guidance on what elements to include. It also provides guidance on what an assessment of a covered entity’s security measures might consider and emphasize.

Breach Investigation. A covered entity shall conduct a “good faith and prompt investigation”, and the law lists considerations to include in the investigation.

Records Disposal. A covered entity or third-party agent must take reasonable measures to dispose of or arrange for the disposal of records containing Sensitive PII when they are no longer to be retained, and the law includes examples of such disposal methods.

A Berlin regional court recently ruled that Facebook’s use of personal data was illegal because the social media platform did not adequately secure the informed consent of its users. A German consumer rights group, the Federal of German Consumer Organisations (vzvb) said that Facebook’s default settings and some of its terms of service were in breach of consumer law, and that the court had found parts of the consent to data usage to be invalid. One concern highlighted by the consumer rights group was that, in Facebook’s app for smartphones, a service was pre-activated that revealed the user’s location to the person they were chatting to. Also, in the privacy settings, ticks were already placed in boxes that allowed search engines to link to the user’s timeline, meaning that anyone would be able quickly and easily to find a user’s profile.

A week after the ruling, Facebook promised to radically overhaul its privacy settings, saying the work would prepare it for the introduction of the upcoming General Data Protection Regulations (GDPR). Facebook has faced repeated attacks from Germany and other European regulators over issues ranging from perceived anti-competitive practices to alleged misuse of customer data. In October, the Article 29 Working Party (WP29) launched a task force to examine the sharing of user data between WhatsApp and Facebook, which it says does not have sufficient user consent. “Whilst the WP29 notes there is a balance to be struck between presenting the user with too much information and not enough, the initial screen made no mention at all of the key information users needed to make an informed choice, namely that clicking the agree button would result in their personal data being shared with the Facebook family of companies,” the group told WhatsApp in October.

Similarly, a Belgian court earlier this month ordered Facebook to stop collecting data on users or face daily fines of €250,000 a day, or up to €100million. The court ruled that Facebook had broken privacy laws by tracking people on third-party sites. “Facebook informs us insufficiently about gathering information about us, the kind of data it collects, what it does with that data and how long it stores it,” the court said. “It also does not gain our consent to collect and store all this information.” The court ordered Facebook to delete all data it had gathered illegally on Belgian citizens, including people who were not users of the social network.

With regards to the German suit, Facebook said it would appeal, releasing a statement that it had already made significant changes to its terms of service sand data protection guidelines since the case was first brought in 2015. In the meantime, Facebook stated it would update its data protection guidelines and terms of services so that they comply with the new EU-wide GDPR rules.

On January 28, 2017, as part of Data Privacy Day, Facebook shared its data privacy principles for the first time. In a blog post drafted by Erin Egan, Facebook’s Chief Privacy Officer, Facebook posted these principles to help users understand how data is used and managed on the site. Among other things, Facebook’s data privacy principles stress user control of privacy, the goal of protecting users’ accounts and implementing security tools (like two-factor authentication), and user ownership of information shared. Facebook also announced the launch of a new education campaign to help users understand how data privacy is handled by the company. As part of this effort, Facebook is preparing to roll out a “Privacy Center” that features important privacy settings in a single place.

This publication comes ahead of the European Union’s (EU) General Data Protection Regulation (GDPR), which will be implemented on May 25, 2018. The GDPR will set stringent data privacy requirements for companies operating in the EU. In recent years, Facebook has faced scrutiny from EU regulators over its handling of user data. Facebook hopes to embrace a more transparent data privacy approach to meet all GDPR obligations.

With the May 25, 2018 deadline quickly approaching, many businesses are scrambling to prepare for compliance with the EU’s General Data Protection Regulation (GDPR), and questions and conversations are heating up. Still others are still trying to wrap their arms around what GDPR is and what it means for U.S. businesses. For those of you still trying to wrap your heads around it, below are a few basics to help familiarize yourself with the regulation and its relevance to you.

I’m a U.S. business. Why does GDPR matter to me?

The reach of the GDPR regulation extends not only to European-based businesses, but also to all companies that do business, have customers, or collect data from people in the EU. If you even have a website that could collect data from someone visiting the site from the EU, your business could be affected. No matter where your business resides, if you intentionally offer goods or services to the European Union, or monitor the behavior of individuals within the EU, the GPDR could be applicable.

What’s the risk?

In addition to the PR or brand risk of being associated with noncompliance, GDPR provides for some pretty significant monetary penalties . Some violations are subject to fines up to 10 million EUR or up to 2% of global annual turnover, whichever is greater. For other violations, it is double – up to 20 million euros or 4% of your global annual turnover, whichever is greater. For large businesses, this could be a substantial amount.

What should I be doing?

First, talk with your general counsel or outside law firm. They can help you interpret the law, review contractual obligations and assess the company’s overall privacy policies to help guide your compliance strategy going forward. They can also help create defensible interpretations within certain ambiguous language in the regulation (e.g., what is “personal data” for purposes of the GDPR?). The Article 29 Working Party, made up of the data protection authorities (DPAs) from all EU member states, has published guidance to clarify certain provisions, which can be helpful during this process.

Second, create a cross-functional team including areas including (but not limited to): communications/PR, IT, customer experience, digital, legal and operations. This may be fairly similar to any cross-functional teams you may have (and hopefully have) already established to prepare for data breaches. This team can begin designing and implementing a compliance strategy. Under certain conditions, your business may need to appoint a Data Protection Officer (DPO) (See Articles 29 and 30).

What are some key points of the GDPR?

GDPR is a data privacy regulation in the EU that is aimed at protecting users’ rights and privacy online. It requires business to assess what kinds of data they’re collecting and to make that data accessible to users. The regulation is long and complex with several moving parts, but four key points may be worth noting.

Key Definitions: You will see several references to controllers, data subjects, personal data, and processing. This vocabulary may be unfamiliar in relation to U.S. law, but here is how these key terms are defined – as a business subject to GDPR, you may be a “controller” or you may be a “processor”. The individual is the “data subject”:

“Controller” = “the natural or legal person, public authority, agency or other body which, alone or jointly with others, determines the purposes and means of the processing of personal data; where the purposes and means of such processing are determined by Union or Member State law, the controller or the specific criteria for its nomination may be provided for by Union or Member State law.”

“Processor” = “means a natural or legal person, public authority, agency or other body which processes personal data on behalf of the controller”

“Personal data” = “any information relating to an identified or identifiable natural person (‘data subject’); an identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person.”

“Processing” = “any operation or set of operations which is performed on personal data or on sets of personal data, whether or not by automated means, such as collection, recording, organization, structuring, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, restriction, erasure or destruction”

Some Key Articles/Provisions:

Article 12. Transparent information, communication and modalities for the exercise of the rights of the data subject.

This article creates rules around how users give consent to record their data. The data subject must be provided with accurate information on all relevant issues, such as the kind of data to be collected or process, and for what purposes. For some particularly sensitive data, (e.g., political opinion, religion, biometric data (including photographs), health data, etc.), consent must be “explicit”. Consent must be “freely given”, meaning that the user has a “genuine” choice and be able to withdraw consent “without detriment”. The data subject cannot be obliged to consent to data processing that is not necessary to provide the service he or she has requested.

For these reasons, the traditional “notice and consent” may not be sufficient, and actionable forms or buttons may be necessary. “Silence, pre-ticked boxes or inactivity,” however, is presumed inadequate to confer consent. Recital 32 of the GDPR notes that an affirmative action signaling consent may include ticking a box on a website, “choosing technical settings for information society services”, or “another statement or conduct” that clearly indicates assent to the processing. “Silence, pre-ticked boxes, or inactivity” however, is presumed inadequate. For those reaching European citizens digitally, working with IT or UX experts may prove important to create a seamless, but compliant, experience.

Article 17. Right to erasure.

The “right to be forgotten” means that businesses must be able to remove data on a user at their “without undue delay”. Further, the businesses have an obligation to erase personal data “without undue delay” under certain additional circumstances.

Article 20. Right to data portability.

Users have the right to receive any data that a business may have on them the firm must provide such data in a “structured, commonly used and machine-readable format”. Further, the data subject has the right to transmit such data to another business without being hindered by the business that provide the data where the processing is either (a) based on certain consents or (b) carried out by automated means. Where technically feasible, the data subject also has the right to have the personal data transmitted directly from one controller to another.

Article 8 limits the ability of children to consent to data processing without parental authorization. Previous drafts of the GDPR had set the age of consent at 13 years old, which would have been consistent with the age set by the United States’ Children’s Online Privacy and Protection Act (“COPPA”). A last-minute proposal aimed to raise the age of consent to 16 years old. In the final draft, the age of consent is set at 16 unless a member state sets a lower age no below 13 years. Thus, unless otherwise provided by member state law, controllers must obtain parental consent when processing the personal data of a child under the age of 16. With the difference between the U.S. age of consent under COPPA set at 13 (COPPA) and the European age of consent under the GDPR set at 16 (unless otherwise lowered by a member state), this could present some challenges for U.S. businesses offering international services.

If you believe your business might be affected, you should already be familiarizing yourself with the GDPR regulations and be well into your compliance plan. The above summary is a sampling of key points and not a comprehensive analysis,, which should be undertaken to better understand your compliance obligations. You should also be aware of the ePrivacy Regulation which will be following on the heels of the GDPR.

Whereas the GDPR covers the right to protection of personal data, while the ePrivacy Regulation encompasses a person’s right to a private life, including confidentiality. There is some obvious overlap here, but the ePrivacy Regulation is intended to particularize GDPR for electronic communications — devices, processing techniques, storage, browsers etc. The laws are intended to be in sync, but the ePrivacy regulations are still up in the air — optimistically forecasted to be finally approved by the end of 2018, although the implementation date remains to be seen. In sum, GDPR compliance is all you can focus on right now, and hopefully GDPR compliance should position your business well for any additional compliance obligations that could subsequently arise from the finalized ePrivacy Regulation.

Today, the FTC issued its National Do Not Call Registry Data book for Fiscal Year 2017 (October 1, 2016 to September 30, 2017).

The National Do Not Call Registry Data Book contains statistical data about phone numbers on the Registry, telemarketers and sellers accessing phone numbers on the Registry, and complaints consumers submit to the FTC about telemarketers allegedly violating the Do Not Call rules. Statistical data on Do Not Call (DNC) complaints is based on unverified complaints reported by consumers, not on a consumer survey. This year’s Data Book has been redesigned to provide more information on robocall complaints, new information about the types of calls consumers reported to the FTC, and includes a complete state-by-state analysis. In addition, the FTC has developed a mini site on its website to make the information in the FY 2017 Data Book more accessible for the public, such as providing a webpage for each state. For the first time, the data behind the report will be available in (.csv) data files. Leading the number of complaints per 100,000 in population was New Jersey, with Puerto Rico in last place.

Here are some statistics from our firm’s geographic footprint states (rankings are based on complaints per 100,000 population).

Today, the FCC voted to pass the Restoring Internet Freedom order, which repeals the 2015 “net neutrality” rules and reverts back to the “light regulatory” touch the FCC previously had in place regarding internet service providers (“ISPs”). Of primary importance, the FCC restored the classification of Broadband Internet Access Services as “information services” under Title I of the Communications Act rather than as telecommunications services under Title II. For purposes of data privacy and security, this reclassification (more specifically, the reversal of the 2015 reclassification) restores the jurisdiction of the Federal Trade Commission to act when broadband providers engage in anticompetitive, unfair, or deceptive acts or practices related to the security and privacy of online consumers. While the FTC had such jurisdiction prior to the 2015 net neutrality order, they are prohibited from regulating common carriers, and so today’s order restores that jurisdiction. Although the final order has not yet been published, today’s press releases outlines that today’s declaratory ruling, report and order, and order, will do the following:

Declaratory Ruling:

Restores the classification of Broadband Internet Access Service as an “information service” under Title I of the Communications Act – the classification affirmed by the Supreme Court in the 2005 Brand X case.

Reinstates the classification of mobile broadband internet access service as a private mobile service.

Finds that the regulatory uncertainty created by utility-style Title II regulations has reduced Internet service provider (ISP) investments in networks, as well as hampered innovation, particularly among small ISPs serving rural consumers.

Finds that public policy, in addition to legal analysis, supports the information service classification, because it is more likely to encourage broadband investment and innovation, thereby furthering the goal of closing the digital divide and benefitting the entire Internet ecosystem.

Requires that ISPs disclose information about their practices to consumers, entrepreneurs, and the Commission, including any blocking throttling, paid prioritization, or affiliate prioritization.

Finds that transparency, combined with market forces as well as antitrust and consumer protection laws, achieve benefits comparable to those of the 2015 “bright line” rules at lower costs.

Eliminates the vague and expansive Internet Conduct Standards, under which the FCC could micromanage innovative business models.

Order

Finds that the public interest is not served by adding to the already-voluminous record in this proceeding additional materials, including confidential materials submitted in other proceedings.

The order was approved by Chairman Pai, and Commissioners O’Rielly and Carr, with dissents from Commissioners Clyburn and Rosenworcel. Chairman Pai and Commissioners Clyburn, O’Rielly, Carr and Rosenworcel each issued separate statements.

Yesterday, the Federal Trade Commission (FTC) and Federal Communications Commission (FCC) announced their intent to coordinate which of the two agencies would coordinate online consumer protection efforts following the adoption of the Restore Internet Freedom Order, and published a draft Memorandum of Understanding (MOU) that outlines those efforts.

The draft MOU outlines a number of ways in which the FCC and FTC will coordinate and collaborate, including:

The FCC will review informal complaints concerning the compliance of Internet service providers (ISPs) with the disclosure obligations set forth in the new transparency rule. Those obligations include publicly providing information concerning an ISP’s practices with respect to blocking, throttling, paid prioritization, and congestion management. Should an ISP fail to make the required disclosures—either in whole or in part—the FCC will take enforcement action.

The FTC will investigate and take enforcement action as appropriate against ISPs concerning the accuracy of those disclosures, as well as other deceptive or unfair acts or practices involving their broadband services.

The FCC and the FTC will broadly share legal and technical expertise, including the secure sharing of informal complaints regarding the subject matter of the Restoring Internet Freedom Order. The two agencies also will collaborate on consumer and industry outreach and education.

The FCC is expected to vote on the order at its December 14 meeting. This order would reverse the 2015 “net neutrality” order reclassifying broadband Internet access service as a Title II common carrier service. According to the FTC’s press release, one of the impacts of this reclassification was to “strip the FTC of its authority to protect consumers and promote competition with respect to Internet service providers because the FTC does not have jurisdiction over common carrier activities.” By reversing the order, the FCC would return jurisdiction to the FTC to policy the conduct of ISPs with respect to their disclosures and privacy practices. Once adopted, the order would require broadband Internet access service providers to disclose their network management practices, performance, and commercial terms of services. The FTC could then police their implementation of those practices under the “unfair and deceptive practices” requirement under Section 5 of the FTC Act.

In response to the MOU, FCC Chairman Ajit Pai stated that the MOU “will be a critical benefit for online consumers because it outlines the robust process by which the FCC and FTC will safeguard the public interest. … This approach protected a free and open Internet for many years prior to the FCC’s 2015 Title II Order and it will once again following the adoption of the Restoring Internet Freedom Order.” Acting FTC Chairman, Maureen K. Ohlhausen, stated that “[t]he FTC is committed to ensuring that Internet service providers live up to the promises they make to consumers .. [and that] [t]he MOU we are developing with the FCC, in addition to the decades of FTC law enforcement experience in this area, will help us carry out this important work.”

FCC Commissioner Mignon Clyburn, who opposes the proposed order, released the following statement: “The agreement announced today between the FCC and FTC is a confusing, lackluster, reactionary afterthought: an attempt to paper over weaknesses in the Chairman’s draft proposal repealing the FCC’s 2015 net neutrality rules. Two years ago, the FCC signed a much broader pro-consumer agreement with the FTC that already covers this issue. There is no reason to do this again other than as a smoke and mirrors PR stunt, distracting from the FCC’s planned destruction of net neutrality protections later this week.”

On November 15, 2017, the Trump administration released the Vulnerabilities Equities Policy and Process. This document describes the process by which U.S. agencies and departments determine whether to disclose or restrict information on vulnerabilities in information systems and technologies. The Vulnerabilities Equities Process (VEP) balances whether to disclose vulnerability information to the vendor or supplier in the expectation that the vulnerability will be fixed or to temporarily restrict disclosure of the information so that it can be used for national security and/or law enforcement purposes.

The Equities Review Board (ERB), consisting of individuals from numerous agencies, functions as the forum for interagency deliberation and determination concerning the VEP. The National Security Agency will function as the VEP Executive Secretariat. The VEP Executive Secretariat will oversee communications, documentation and recordkeeping for the VEP. The VEP Executive Secretariat will also publish a report of unclassified information on an annual basis.

The VEP provides steps for submitting and reviewing identified vulnerabilities:

When an agency determines that a vulnerability reaches the threshold for entry into the VEP, it will notify the VEP Executive Secretariat and provide a recommendation for disclosure or restriction of the vulnerability.

The VEP Executive Secretariat will provide notice to all agencies of the ERB and request agencies to respond if they have a strong interest (i.e., “equity”) in the vulnerability. Any agencies with a strong interest in the vulnerability must concur or disagree with the recommendation.

The ERB will then reach a consensus on whether or not to disclose or restrict the vulnerability

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